What is the  PHYL ETF ?
4 min read
By Ron Koren, ETF Insider

What is the PHYL ETF ?

In the ever-evolving world of finance, exchange-traded funds (ETFs) have emerged as popular investment options. One such ETF gaining attention is the PHYL ETF. In this article, we will delve into the intricacies of the PHYL ETF, providing insights into its overview, underlying assets, benefits, and crucial considerations before investing.

PHYL ETF: Overview

The PHYL ETF is designed to achieve its investment objective by primarily investing in a portfolio of high-yield bonds, commonly known as junk bonds, issued by companies or governments. Under normal market conditions, the fund allocates at least 80% of its investable assets to a diversified portfolio of high-yield bonds rated below investment grade. Additionally, the fund may invest in other instruments, including derivatives, with similar economic characteristics. The term "below investment grade" refers to instruments rated Ba1 or lower by Moody's, BB+ or lower by S&P Global Ratings, or Fitch, or comparably rated by another recognized statistical rating organization.

PHYL ETF: Underlying and Exposure

The PHYL ETF's underlying assets primarily consist of fixed-income instruments issued by various entities. These instruments may include fixed income securities issued by the U.S. Government, its agencies, and instrumentalities, commercial paper, asset-backed securities, mortgage-backed securities, variable and floating rate instruments, bills, notes, obligations issued by banks and corporations, convertible and non-convertible securities, loan participations, and assignments, and municipal bonds and notes. The ETF may also invest in distressed securities or those in default. The fund's investment in derivatives is subject to a 25% limit of its net assets and is included in the 80% investment policy, provided the underlying assets of such derivatives are based on high-yield fixed income instruments rated below investment grade.

PHYL overlap What is the  PHYL ETF ?PHYL overlap What is the PHYL ETF ?

PHYL ETF: Benefits to Invest

Investing in the PHYL ETF offers several advantages for investors. The fund's focus on high-yield bonds provides the potential for attractive returns. Moreover, the diversification achieved through a mix of fixed income instruments can help reduce the overall portfolio risk. Additionally, the ETF's active management approach allows for flexibility in pursuing expected total returns, not just relying on yield.

PHYL ETF: Considerations Before Investing

While the PHYL ETF presents compelling investment opportunities, potential investors should consider certain factors. High-yield bonds come with higher credit risk due to their below-investment-grade rating, which may lead to increased volatility. Furthermore, the fund's exposure to derivatives warrants careful evaluation, as derivatives can amplify both gains and losses. Investors should also take note of the fund's foreign currency-denominated fixed income securities, which may introduce currency risks.

In conclusion, the PHYL ETF offers investors an opportunity to access a diversified portfolio of high-yield bonds and other financial instruments. Understanding the ETF's underlying assets, benefits, and considerations before investing is crucial to making informed decisions. As with any investment, investors should conduct thorough research and consider their risk tolerance and investment objectives before adding the PHYL ETF to their portfolios.

Disclaimer: We are not providing any investment advisory services.


PHYL ETF issuer
PHYL ETF official page

PHYL quote and analysis

Discover the top holdings, correlations, and overlaps of ETFs using our visualization tool.
Our app allows you to build and track your portfolio.
To learn more about the PHYL PGIM Active High Yield Bond ETF, access our dedicated page now.

Get started


  • What is the PHYL ETF?

    The PHYL ETF, also known as the Defiance Next Gen H2 ETF, is an exchange-traded fund that focuses on providing exposure to companies involved in the hydrogen fuel industry, particularly those engaged in the development, production, and utilization of hydrogen-related technologies.

  • What is the underlying index that the PHYL ETF aims to track?

    The PHYL ETF aims to track the performance of the BlueStar Global Hydrogen and NextGen Fuel Cell Index. This index includes companies that are leaders in the hydrogen fuel cell industry and related sectors.

  • What types of companies are included in the PHYL ETF?

    The PHYL ETF includes companies that are actively involved in various aspects of the hydrogen fuel cell industry, such as manufacturers of hydrogen fuel cells, hydrogen storage technologies, hydrogen production, and infrastructure development for hydrogen utilization.

  • How does the PHYL ETF work?

    The PHYL ETF operates by investing at least 80% of its net assets in financial instruments, such as swap agreements, securities of the underlying index, and exchange-traded funds (ETFs) that track the index. It seeks to provide leveraged exposure to the performance of the BlueStar Global Hydrogen and NextGen Fuel Cell Index.

  • What are the advantages of investing in the PHYL ETF?

    Investing in the PHYL ETF offers investors the opportunity to participate in the growth potential of the hydrogen fuel cell industry. The ETF provides diversification across companies involved in various aspects of the industry, simplifies access to this specialized sector, and may offer potential returns that are magnified relative to the index it tracks.